SIX hires Digital Asset for post-trade DLT; Swift bids for standards role
22 September 2016 | 7973 views | 0
SIX Securities Services has contracted with Digital Asset Holdings to develop a proof of concept that will demonstrate the commercial viability of distributed ledger technology across the Swiss financial market, with an initial focus on securities lifecycle processing.
The Swiss financial infrastructure player says it selected Digital Asset as the business and technology partner for the project following a competitive tender.
Digital Asset, headed up former JPMorgan exec Blythe Masters, already has a foot in the door in the Australian marketplace, where ASX is exploring the potential of using the firm's technology to replace the Chess settlement system.
The US-based firm also has a presence in the Swiss market, having acquired Zurich-based Elevence Digital Finance, a startup that has developed a modelling language for determining rights and obligations in blockchain collaboration agreements.
At SIX, the initial phase of the project will demonstrate the ability to build and incorporate distributed, encrypted, straight through processing tools into existing securities transaction flows, and propose a roadmap for extending this to a production-ready service. The roadmap will additionally lay out a set of propositions for extending the technology across the post-trade ecosystem as a whole.
According to Thomas Zeeb, division CEO SIX Securities Services: "Distributed ledger technology and its potential role in post trading is key to our business. We need to understand it, and more importantly, its applicability and future flexibility in order to keep ahead of the game. Partnering with Digital Asset is a way to accelerate our own development plans and leverage their experience in this area.”
SIX has already made a start on its own blockchain journey, developing a protoytpe application for corporate actions that will be on display at Sibos in Geneva next week.
The Swift interbank financial technology show is set to be a hotbed of discusssion about the role of distributed ledger technology in the financial marketplace. In advance of the event, the co-operative has issued a new paper which examines the need for the financial industry to find agreement on the format of shared data, business processes, roles and responsibilities in the roll out of distributed ledger technology - and sets out its own position as an honest broker in the development of a common language.
The paper outlines the necessary preconditions for standardisation of distributed ledgers and associated smart contracts, and the possibility of repurposing some of today’s existing standards.
“The promise of DLT is the synchronisation of financial data between multiple organisations, whilst smart contracts can further provide self-executing efficiencies on the ledger,” says Stephen Lindsay, head of standards, Swift. “The paper recognises that full-scale standardisation of DLT/SC use cases is premature; however, Swift stands ready to work with the community to conduct further studies into the reuse of existing business standards in order to better facilitate the efficient workings of DLT/SC technologies for the financial industry as a whole.”